MILAN (Reuters) - Veteran Italian banker and former Industry Minister Corrado Passera topped expectations by raising 600 million euros (£526 million pounds) from investors with the aim of acquiring a small bank.

Passera, chief executive of Intesa Sanpaolo (ISP.MI) from 2002 to 2011, raised the funds by launching a special purpose acquisition company (SPAC), a vehicle whose shares will start trading on Feb. 1 on the alternative investment segment of the Milan bourse.

SPACs normally take a minority stake in a target company to support its growth.

Passera’s SPAXS vehicle intends instead to gain control of a small bank, recapitalise it and develop its business, using digital technologies, to focus on small and medium-sized companies, whose debts it would help restructure.

SPAXS had a target to raise 400-500 million euros but orders from investors willing to fund the project totalled 760 million euros and a cap was set at 600 million euros, the company said in a statement confirming comments by a source earlier on Friday.

The project’s other founding partner is Andrea Clamer, who until October last year headed the non performing loan division of Banca IFIS’s (IF.MI), a bank that specialises in recovering bad debts.

Other high-profile Italian banking executives are expected to join in.

Passera and Clamer are providing together 3 percent of the amount raised by buying special shares without voting rights that can be converted into ordinary shares.

Giuseppe Di Mino, managing partner at Amber Capital, said his fund, an investor in Italian banks, had backed the project which was “an interesting initiative” led by “capable managers”.

“At a time when many Italian banks have their hands tied because of their bad loan pile, it could definitely be interesting to have a newcomer with a cleaned-up balance-sheet and a strong capital base,” Di Mino said.

With 324 billion euros of impaired loans still sitting on banks’ balance sheets, Italy’s is Europe’s largest market for distressed assets.

A significant share of Italian soured debts are loans to businesses that could still avoid bankruptcy if properly restructured.

Banca IMI and Credit Suisse Securities acted as joint global coordinators for the offer and, together with Equita SIM, as joint bookrunners.

The Boston Consulting Group and law firm Gatti Pavesi Bianchi advised SPAXS and its founders while Latham & Watkins was the global coordinators’ legal adviser.